Executive Summary
ACCO Brands reported a mixed Q4 2024 characterized by modest revenue decline but notable margin expansion and stronger free cash flow, supported by aggressive cost actions and working-capital discipline. Revenue for Q4 reached $448.1 million, down 8.3% year over year, while gross profit was $155.5 million and gross margin stood at 34.70%, up 70 basis points from the prior year. Operating income was $42.0 million (margin 9.37%), and net income was $20.6 million ($0.22 per share).
Outside of the quarter, ACCO advanced its multi-year cost-reduction program, targeting $100 million of cumulative annual savings by end-2026 (up from a prior target) after delivering roughly $25 million of savings in 2024. The company reduced inventory by 17% in 2024 and improved working capital, contributing to free cash flow of $132 million for the year and a net-debt reduction of $94 million. Management reaffirmed a disciplined capital-allocation framework—debt reduction, dividends, share repurchases, and selective M&A—while refinancing facilities to extend maturities to 2029 and expanding the revolving facility to preserve liquidity.
Management signaled a strategic shift toward adjacencies beyond traditional office categories (e.g., ergonomics and technology accessories) and an accelerated in-market push via product development, pricing, promotions, and select inorganic opportunities. The near-term 2025 outlook contends with significant volatility from tariffs, foreign exchange, and macro softness, with expectations for flat-to-broadly improving revenue trends over the year and an adjusted EPS range of $1.00–$1.05. The company also guided for free cash flow of $105–$115 million and a target leverage of roughly 3.0–3.3x by year-end 2025. While the first quarter is historically smaller, the company anticipates a 5%–8% year-over-year decline in comparable sales in Q1 2025 due to FX headwinds and softer demand. This outlook underscores ACCO’s emphasis on margin resilience and cash-generation as levers to drive longer-term profitability.
Key Performance Indicators
QoQ: 59.70% | YoY:179.55%
QoQ: 121.51% | YoY:134.68%
QoQ: 127.04% | YoY:135.48%
Key Insights
Revenue (Q4 2024): $448.1 million; YoY: -8.29% | QoQ: +6.46%
Gross Profit: $155.5 million; Gross Margin: 34.70%; YoY: -8.53%; QoQ: +13.59%
EBITDA: $62.1 million; EBITDA Margin: 13.86%
Operating Income: $42.0 million; Operating Margin: 9.37%; YoY: +179.55%; QoQ: +59.70%
Total Other Income/Expenses Net: -$10.4 million
Income Before Tax: $31.6 million; Pre-tax Margin: 7.05%
Net Income: $20.6 million; Net Margin: 4.60%; YoY: +134.68%; QoQ: +121.51%
EPS (GAAP): $0.22; EPS Diluted: $0.21; Weighted Avg...
Financial Highlights
Revenue (Q4 2024): $448.1 million; YoY: -8.29% | QoQ: +6.46%
Gross Profit: $155.5 million; Gross Margin: 34.70%; YoY: -8.53%; QoQ: +13.59%
EBITDA: $62.1 million; EBITDA Margin: 13.86%
Operating Income: $42.0 million; Operating Margin: 9.37%; YoY: +179.55%; QoQ: +59.70%
Total Other Income/Expenses Net: -$10.4 million
Income Before Tax: $31.6 million; Pre-tax Margin: 7.05%
Net Income: $20.6 million; Net Margin: 4.60%; YoY: +134.68%; QoQ: +121.51%
EPS (GAAP): $0.22; EPS Diluted: $0.21; Weighted Avg Shs Out: 94.0 million; Diluted: 95.9 million
Cash Flow / Liquidity: Net cash provided by operating activities $52.7 million; Free Cash Flow $45.4 million; Cash at end of period $74.1 million; Net debt $848.9 million; Total debt $923.0 million
Balance Sheet: Total assets $2.2284 billion; Total liabilities $1.6223 billion; Total stockholders’ equity $606.1 million; Working capital improvements and inventory reduction contributed to stronger cash flow and leverage metrics.
Liquidity/Leverage: End of 2024 consolidated leverage 3.4x; target long-term leverage 2.0–2.5x; Revolver refinanced down to $468 million; Nearly $330 million available under revolver at year-end; Debt reduction and cash flow sequencing expected to support deleveraging over time.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
448.10M |
-8.29% |
6.46% |
| Gross Profit |
155.50M |
-8.53% |
13.59% |
| Operating Income |
42.00M |
179.55% |
59.70% |
| Net Income |
20.60M |
134.68% |
121.51% |
| EPS |
0.22 |
135.48% |
127.04% |
Key Financial Ratios
operatingProfitMargin
9.37%
operatingCashFlowPerShare
$0.56
freeCashFlowPerShare
$0.48
dividendPayoutRatio
33.5%
Management Commentary
Strategic focus and growth initiatives:
- ACCO plans to expand beyond traditional core categories (e.g., expanding into ergonomics and near-adjacencies like technology accessories and learning/creative). CEO Tom Tedford noted several near-term launches and the ‘Beyond Console’ initiative in gaming as examples of portfolio broadening and growth opportunities.
- Management emphasized the importance of accelerating innovation and new product development to restore sales growth, strengthen brand leadership, and defend category leadership in key markets.
Operational and financial discipline:
- The company highlighted a multiyear cost-reduction program targeting $100 million in cumulative annualized savings by end-2026 (up from a prior target) and reported roughly $25 million of savings realized in 2024.
- 2024 gross margins expanded by 70 basis points, while SG&A expenses declined by about $30 million year over year, supporting an improved fourth-quarter operating margin of 9.37% despite lower top-line activity.
- ACCO generated free cash flow of $132 million for 2024, aided by lower working capital and improved Brazil receivables timing; net debt declined by $94 million to $766 million at year end, with a refinancing of credit facilities extending maturities to 2029 and a smaller revolver.
Market environment and guidance:
- The Q4 results were impacted by higher unfavorable foreign currency effects, contributing to $12 million lower sales and a $0.02 reduction in EPS vs prior guidance.
- Management acknowledged near-term volatility from tariffs, FX, and uncertain macro demand but signaled that full-year 2025 sales are expected to be flat to improving, with adjusted EPS guidance of $1.00–$1.05 and free cash flow of $105–$115 million. First-quarter 2025 sales are expected to be down 5%–8% YoY, with FX headwinds around 4% in Q1 narrowing through the year.
We are going to get into adjacent categories in greater emphasis and with greater impact on the sales line. We started that this year with ergonomics, and we had early success with a number of our initiatives, particularly in our European business.
— Tom Tedford
We are actively pursuing highly synergistic accretive M&A that will provide scale and leverage from our leaner optimized cost structure.
— Tom Tedford
Forward Guidance
2025 Outlook and assumptions:
- Comparable sales expected to decline 1%–5% for the full year, with higher FX headwinds in the near term.
- Adjusted EPS guidance: $1.00–$1.05 for the full year 2025.
- Gross margins expected to improve versus 2024; SG&A costs roughly flat with savings from the cost actions offset by merit/incentive compensation and inflationary pressures.
- Intangible amortization for 2025 estimated at $45 million (~$0.32 per share).
- Free cash flow guidance: $105–$115 million.
- Net leverage anticipated to end around 3.0x–3.3x; management targets a mid-term leverage trajectory toward 2.0x–2.5x as cash flow strength and selective capital deployment unfold.
- First-quarter 2025 guidance: comparable sales down 5%–8% and a Q1 FX headwind of ~4% (FX excluded from the comparable base).
Assessment: The outlook hinges on stabilization of demand, successful execution of cost savings and revenue-generating initiatives (adjacencies, product launches, pricing/promo optimization), and the ability to pass through tariffs via pricing. Investors should monitor progression toward the 2026 cost-savings target, progress in gaming/adjacency categories (especially ergonomics and tech accessories), and the degree to which currency and tariff headwinds abate over 2025.